This article is from the Australian Property Journal archive
A LOCAL private investor has paid $3.75 million for a commercial building at Hardware Lane in the heart of the Melbourne CBD.
The price reflects a low 3.5% yield for a retail and office building. Located at 27-31 Hardware Lane, the three storey commercial building has a net lettable area of 410 sqm, incorporating two retail shops at ground floor level and two floors of office accommodation above, on a 178 sqm site.
Selling agent Savills Australia Victoria divisional director of investment sales Joel Wald said the initial yield reflected the strength of the investor market.
“Strong investor demand, scarce opportunities, historically low interest rates and potential rental growth will ensure market yields remain under pressure,” he added.
The building was sold subject to several leases returning $133,000 per annum net.
The smaller shop is leased to a café operator on a five year term expiring September 2011, and the larger shop to J. Knight and Co. locksmiths on a six-year term expiring June 2012. The upper floors are leased to the Henry George Club (level 1) and NJ Travers.
Australian Property Journal
